tv [untitled] December 30, 2011 9:31am-10:01am PST
we're starting to make change now. even though we do not have the definitive cause or set up houses in place -- or set of causes in place, we are starting to do the reports we can look at it and make some good decisions on how to move forward between us and our contractors to make sure this kind of incident does not happen again. commissioner moran: thank you. commissioners? -- >> thank you. commissioners? commissioner moran: thank you, steve. public comment on that report? thank you. that is the end of the general managers' report? thank you. the next item is the report from the area water supply conservation agency. >> brief comment on steve's report. your staff has kept me informed
on the main break. we have received calls from interested officials. i'm pleased to report that we have told them you guys are doing a good job. julie mentioned the letter we sent to ed and the commission, and i wanted to go over briefly a report that i gave to our board of directors just a couple of weeks ago. so you will see the flavor of how we approach looking at the way you are managing the program and the concerns and questions we have. i will refer -- mike, if you could use the overhead projector. these are slides from that report. first, we look at a comparison of the projects and programs status relative to the budgets and schedules the commission adopted back in july of this
year. we cite simple questions and answers for the benefit of our board of directors. they are not as close as you folks are. very close tolerance -- is it on schedule now? yes. the program completion date remains as it was when you adopted those changes. i will observe your five-minute time line, so i'm going to select some of the slides and leave a couple of them out. that prior slide had to do with the overall program. what about individual projects? can we break this down? some projects taking a little bit more budget than originally adopted. those issues have been reported to you. the schedules very close within one to four months. we focused on two large projects. julia has mentioned these to you before. the tunnel classification to
change, the groundwater and flows to squeeze in ground -- all of those things we anticipate the staff would come to you for the extension that is on your agenda today. calaveras dam is similar. different soil conditions. for the benefit of our board members, we asked a series of questions and answer them. where the schedule impacts reasonably preventable? was there something that could have been done to avoid these? the answer is no. we think that the staff and their consultants took reasonable precautions and did reasonable work during investigating the site conditions. you had been hit with a combination of issues and the magnitude of those issues that could not have reasonably been foreseen. did the puc take appropriate actions in response to those conditions? again, we say yes. you did the right things.
the calaveras dam is the critical project at this point in time. if that goes along, that will extend -- if that those long, that will extend the completion date of the project. in answer to the question of what we're doing, we have been investigating a number of issues for several months. we were confirming our findings and conclusions with staff for following up on issues that we did not understand, numbers we did not understand, and then highlighting the issues or potential issues to questions with the board, with your general manager. we do have six recommendations, but rather than go through those, i thought i would just use the tunnel on your consent calendar today to highlight a
couple of questions, and for your questions. are the scheduled extension is necessary? the answer is yes. we have looked at that. you have had reports that absolutely are prudent, and not just concerned for money and schedule, but for worker safety. the people working in that tunnel need to be safe. i can tell you for a fact i would never go into the tunnel because i am chicken, and i honor the men and women that do go in. is it prudent to expect delays? the answer is yes. the memo you have today talks about trends and ask for more time extensions to be made available in case more of the same conditions are run into. are the extensions requested sufficient? that we cannot tell. we do not know if the trends that are projected that your staff is using our -- most engineers are optimistic.
i spoke with the general manager who said that project manager makes conservative estimates, but we do not know that, and from the staff report, you cannot know that. a reasonable question from a commissioner might be, "will you have to come back for more time, do you think, and what impact will that have on the program?" that is the last question -- what is the potential impact of these extensions on the program? does it make the tunnel a critical impact? we do not believe so, but we think it would be helpful. we are trying to be constructed and assist you in completing the program successfully, and we think the answer to these questions would be helpful. that concludes my presentation. be glad to answer questions or respond to comments. commissioner moran: thank you.
first of all, i appreciate the tone of that presentation. i think we respect and count on, you know, knowledgeable people who are outside the organization to take a look at us, and we have a variety of those folks -- auditors and advisory committees and you and your organization are certainly primary among those. our water professionals, and beyond that, you have a huge stake in how this comes out, so i appreciate those comments, and i think one of the things that we have been talking about internally is that we are entering into a stage of the construction program where we are spending huge amounts of money. i think the burn rate currently
is about $30 million a quarter -- did i get that right? >> and month. commissioner moran: oh, a month? ohly off -- only off by a factor of three. that means things are happening quickly president moran: and that is not what they were intended for. it is important that we stay up to date, that is why you were in front of us today and we will continue to see what the regular basis -- you on a regular basis. thank you. any public comment? thank you. mr. secretary, will equal the consent calendar?
>> considered to be retained by the san francisco public utilities commission and will be acted on by a single vote of commission. a, for the new a ministry of building. and authorize the hon general manager to execute and increase the agreement not to exceed 14,001,400 --- the water systemt funded program to lowest qualified bidder. award water enterprise fund contract for recovery project.
president moran: any other public comment? all those in favor? the motion passes. let's see. for regular business, mr. cheng is not here. so let's pass on that item. we also, it's not 1:30 so we can't go to item 11. >> we can start item 12 if you like. president moran: ok. there's nothing before that that leads into that. why don't we do that. you're our next.
>> ok. good afternoon. i'm mike campbell from clean powersf. i have five slides to get through in five minutes and i think i can do it. first, to summarize the resolution that is before you for consideration, a contract with shell. your approval is the approval of the master contract and the final revisions that are still in the works. we need to be consistent with the substantive matters that are in the resolution the attached to those materials. and also authorized the general manager to submit the contract
to the board of supervisors for consideration as well as a supplemental appropriation. those are funds that we talked about in the past related to collateral and other items. the general manager would need to return to this body for further approval before executing a final confirmation agreement. one item is how we need to the bond requirement. there are several conditions precedent that are outlined in the contract that would need to be established prior to making a final contract executed and launching the program. there is also a term sheet. we talked about the activities of the first time it was before you. the general manager will continue discussions with noble america. i touched base about the conditions present.
the approvals go in two steps. what is really before you, the master contract is really the rules of the road in terms of the services being provided and how the relationship to work. there is the confirmation agreement that would have the dates of service, specific start watching dates, final pricing, and the types of products being purchased. and we would be coming back for another set of approvals on the confirmation agreement. some high level items for the confirmation agreement and what it requires. we would have to have rates in place for the fairness board and the claim power -- clean po wer sf program. the sfpuc would have to have
whatever is necessary. the appropriations for the supplier contract will need to be authorized an $19.5 million. they will have to be able to meet the internal reserve policies. we will need to have the back office relationships established, right now we are a negotiating with noble america's. the termination provisions will not take effect until the final confirmation assigned by the city. i want to take the a moment to recognize some folks from the city. ed brown, mike davis, and linda hamilton. they're here to answer questions
and there are also here showing their commitment to the program. -- and they are also here showing their commitment to the program. we appreciate their hard work right alongside coming up with a new form of contract. the next won't spend a lot of time on this one unless i get the dreaded beep-beep from the president. in the terms sheet, there are key parts i wanted to highlight. it addresses how the electronic transaction information would work. what the contractors role would be, and the term sheet does specify that they would be locating because interactivity is in san francisco. there is even a date specified of no later than six months after the launch of the program.
let me touch base on timeline. were we are here now, the sf puc contract and the 19.5 million. a parallel path, we expect the master contract to be approved by the board of supervisors. we're working toward the completion of the contract that noble americas. introduced at the board of supervisors, we expect the economist and the comptroller will have the report on the program that will be available for the supervisor's consideration. sometime in january, board approval could be finalized.
the new areas and we think we will be setting the not to exceed rate. setting the rates for the various class's. = = ca -- classes. the not to exceed rates will be approved by the body and to go before the board where there'll be some time where it can rejected those rates or not. then we jump to march where we get the final confirmation pricing from a shelshell, some t below that, that would be the rates that get put into customer and modifications along with ought out notices. -- opt-out notices. they may be making the final
policy decisions in february. that is the earliest they can be at this point. they have to issue a decision at the end of december to meet that. i am not sure it will necessarily happen. february is when we expect, it could be march. it is the position of this commission to make sure that it is known before we move forward. if it is outside of our control, it might cause a push back for us. assuming it doesn't happen, we can be looking at enrollment in the july or august time frame. we were talking about july because that is when the flat generation rates go into effect. we don't want to be launching the program before then, but what ever is magic about that particular day, the lack of action requires us to push
something back, it is not a killer for the program at any way. i am happy to answer questions. commissioner torres: are you familiar with a letter addressed to mike hosch from steve lawrence regarding commission -- >> it just came in last night, i am not sure everybody on staff saw it. commissioner torres: reference is the notion of the rates, and how confusing it is. >> is not this item. commissioner torres: forgive me. secondly, we also received a letter from many of the environmental organizations.
are you familiar with that letter? >> it was dated december 1. >> it also came in after 5:00 last night. that is when it came in. commissioner torres: may i read it to you very quickly? i don't mean to put you on the spot. we urge you in the strongest possible terms to make local, affordable and renewable electricity and green jobs the foundation upon which clean asset will be launched -- clean sf will be launched. you are familiar with that concept? >> yes. commissioner torres: and to ensure that a comprehensive spoke of work is completed. you're familiar with that as
well. are we going to make a local affordable rental electricity on which clean power will be launched? >> i think that there is general agreement on the goal that we want to do a robust global build out and have the program that is as expensive as possible and san francisco. i that there is disagreement on the strategy for how that happens. generally speaking, the staff's approach to this is that to have a local build up, you need money and you need to customers. you have to start somewhere. start with a program that brings in customers and money that makes it so you can have someone who can pay for the power and can use the power. commissioner torres: where in the resolution is the goal? >> it is of the program is set
up. commissioner torres: we are committing to a robust local development. where does it say that? >> is integral to every policy statement we have made. commissioner torres: i would think it is in the resolution. this is the document that we are being asked to approve. >> the item before you was of the entire program, it was the contract. that is why we we did not reiterate the different policy statements. >> my understanding is that they are under contract with local power to develop a plan and timeline for the local bill about -- buildout component. we extended the contract to take us to, i don't know when.
>> it is about 11-month contract. >> there will be a plan being developed with the hope that the local buildout will be generated from the first phase of the program. commissioner torres: why isn't it in this resolution? >> i can add it. we can add all of the policy statements if you like. commissioner torres: i think that is great, i just want to see it in writing. >> the different is not if it is the end result of the program, it is what comes first. it generates that -- >> what is in front of you is
the amendment for the resolution. we need to enter that into somebody can work on language. >> if i can direct your attention, on page 8, the fifth whereas. the resolution attached to it. >> the second page of the resolution. commissioner torres: ok. >> there is a section that notes that this allows the development of new renewable resources, it is part of the process we are looking at. commissioner torres: what item on page two? page eight? this part. >> it describes the process that
the general manager was describing. the issue related to this contract is that when we develop those local generation, how does it go in to the contract. it allows for the generation to be rolled in. the focus of this was the contract, not the program. commissioner torres: roman numeral iv, the customer revenue stream is established. the condition preceding this, that is how the customer is -- >> there is a substitution clause in there, correct? >> as we can build of the generation, we will not be stuck with having fuel generation, we can roll in. >> is the language in the
resolution sufficient for your purposes, commissioner? commissioner torres: i don't know yet. >> maybe we will hear some testimony. supervisor campos is here. if you could also address this unusual circumstance where it appears that some of the proponents are urging us not to proceed. >> thank you for giving me the opportunity to be here and for accommodating our schedule. we had the last board meeting of the calendar year, is a busy day. i want to thank the general manager and his staff for all the work they have put into this very important project for us. i think the question that was raised by commissioner torres is an excellent question.
i would not be here asking you to approve this matter if i did not feel that there was a commitment on the part of the puc to have a strong, robust, local build out. the reason it has taken time to get to this point, we want to make sure that before we came to the board of supervisors with a contract on community choice aggregation, that there was actual action on the issue of the bill out. i believe the action was taken when the work was renewed. to the extent that they raised about the language of the resolution, from my perspective, if you can add language, it reinforces that beyond right out and it is a very positive thing. the board of supervisors, from
my perspective, nothing should move forward unless there is a clear commitment about having as robust a bill out as we possibly can, he billed out tied to the generation of energy by the city and county, making sure there is a local higher component that is as meaningful as possible. i am here today, nevertheless, to ask you to approve this matter. i believe this is an important step that needs to be taken. it is one of many steps that needs to be taken. there is still a lot more work that needs to be done. the build up being a key component of that work. the way that this contract is structured, it will allow for incorporation and inclusion of the result of that work. i don't believe that the two are mutually exclusive to the contrary.